How are MPC covered call max profit and max loss calculated?

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the MPC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $1,799.50 per contract and the computed maximum loss is -$25,199.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.

What is the breakeven for a MPC covered call?

The breakeven for the MPC covered call priced on this page is roughly $252.01 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current MPC market-implied 1-standard-deviation expected move is approximately 10.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.

How does current MPC implied volatility affect this covered call?

MPC ATM IV is at 36.60% with IV rank near 46.84%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.

MPC Covered Call Strategy

MPC (Marathon Petroleum Corporation), in the Energy sector, (Oil & Gas Refining & Marketing industry), listed on NYSE.

Marathon Petroleum Corporation (MPC) functions as a prominent integrated energy enterprise, primarily concentrating its downstream operations across the United States. Its business is bifurcated into two main divisions: Refining & Marketing, and Midstream. The Refining & Marketing segment is responsible for processing crude oil and various other raw materials at its refineries, strategically located in the U.S. Gulf Coast, Mid-Continent, and West Coast regions. This division also acquires refined petroleum products and ethanol for subsequent distribution. Key outputs from this segment encompass a diverse array of transportation fuels, including different gasoline blends, heavy fuel oil, and asphalt.

MPC (Marathon Petroleum Corporation) trades in the Energy sector, specifically Oil & Gas Refining & Marketing, with a market capitalization of approximately $74.17B, a trailing P/E of 16.18, a beta of 0.52 versus the broader market, a 52-week range of 158-272.46, average daily share volume of 2.4M, a public-listing history dating back to 2011, approximately 18K full-time employees. These structural characteristics shape how MPC stock options price implied volatility around earnings windows, capital events, and macro-driven sector rotations.

A beta of 0.52 indicates MPC has historically moved less than the broader market, dampening realized volatility and producing tighter expected-move bands per unit of dollar exposure. MPC pays a dividend, which adjusts put-call parity and shifts the ex-dividend pricing across the listed chain.

What is a covered call on MPC?

A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income.

Current MPC snapshot

As of June 30, 2026, spot at $255.28, ATM IV 36.60%, IV rank 46.84%, expected move 10.49%. The covered call on MPC below is built from the same end-of-day chain, with strikes snapped to listed contracts and premiums pulled from the bid/ask midpoint at a 17-day expiry.

Why this covered call structure on MPC specifically: MPC IV at 36.60% is mid-range versus its 1-year history, so the credit collected on a MPC covered call sits in line with its long-run distribution, with a market-implied 1-standard-deviation move of approximately 10.49% (roughly $26.79 on the underlying). The 17-day window matched to the front-month expiry keeps theta exposure bounded while still capturing the post-snapshot move; longer-dated MPC expiries trade a higher absolute premium for lower per-day decay. Position sizing on MPC should anchor to the underlying notional of $255.28 per share and to the trader's directional view on MPC stock.

MPC covered call setup

The MPC covered call below is built from the end-of-day chain, with each option leg priced at the bid/ask midpoint of its listed strike. With MPC near $255.28, the first option leg uses a $270.00 strike; additional legs (when the strategy has them) anchor to spot-relative offsets. Premiums come from the bid/ask midpoint on the listed MPC chain at a 17-day expiry; the cross-strike IV skew is reflected directly in the per-leg values rather than approximated. Quantity sizing assumes one contract per option leg (or 100 MPC shares for the stock leg in covered calls and collars).

Action	Type	Strike / Basis	Premium (est)
Buy 100 shares	Stock	$255.28	long
Sell 1	Call	$270.00	$3.28

MPC covered call risk and reward

Net Premium / Debit: -$25,200.50
Max Profit (per contract): $1,799.50
Max Loss (per contract): -$25,199.50
Breakeven(s): $252.01
Risk / Reward Ratio: 0.071

Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium.

MPC covered call payoff curve

Modeled P&L at expiration across a range of underlying prices for the covered call on MPC. Each row is one sampled price point from the computed payoff curve; the full curve uses 200 price points internally before being summarized into 10 rows here.

P&L at expiration across the modeled underlying-price range. Green shading marks profitable regions, red shading marks loss regions. Dotted purple verticals mark breakevens; the solid dark vertical marks current spot.

Underlying Price	% From Spot	P&L at Expiration
$0.01	-100.0%	-$25,199.50
$56.45	-77.9%	-$19,555.23
$112.90	-55.8%	-$13,910.96
$169.34	-33.7%	-$8,266.69
$225.78	-11.6%	-$2,622.41
$282.22	+10.6%	+$1,799.50
$338.67	+32.7%	+$1,799.50
$395.11	+54.8%	+$1,799.50
$451.55	+76.9%	+$1,799.50
$507.99	+99.0%	+$1,799.50

When traders use covered call on MPC

Covered calls on MPC are an income strategy run on existing MPC stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.

MPC thesis for this covered call

The market-implied 1-standard-deviation range for MPC extends from approximately $228.49 on the downside to $282.07 on the upside. A MPC covered call collects premium on an existing long MPC position, trading off upside above the short call strike for immediate income; the short strike selection should reflect the trader's view on whether MPC will breach that level within the expiration window. Current MPC IV rank near 46.84% is mid-range against its 1-year distribution, so the IV signal is neutral; the covered call thesis on MPC should anchor more to the directional view and the expected-move geometry. As a Energy name, MPC options can move on sector-level news flow (peer earnings, regulatory updates, industry-specific macro data) in addition to MPC-specific events.

MPC covered call positions are structurally neutral to slightly bullish; the modeled P&L assumes European-style exercise at expiration and ignores early assignment, transaction costs, dividends paid before expiry on the stock leg (when present), and the bid-ask spread on the listed chain. MPC positions also carry Energy sector concentration risk; news flow inside the sector (peer earnings, regulatory shifts, supply-chain headlines) can move MPC alongside the broader basket even when MPC-specific fundamentals are unchanged. Short-premium structures like a covered call on MPC carry tail risk when realized volatility exceeds the implied move; review historical MPC earnings reactions and macro stress periods before sizing. Always rebuild the position from current MPC chain quotes before placing a trade.

Frequently asked questions

What is a covered call on MPC?: A covered call on MPC is the covered call strategy applied to MPC (stock). The strategy is structurally neutral to slightly bullish: A covered call pairs long stock with a short out-of-the-money call, collecting premium and capping upside above the short strike in exchange for income. With MPC stock trading near $255.28, the strikes shown on this page are snapped to the nearest listed MPC chain strike and the premiums come straight from the end-of-day bid/ask midpoint.
How are MPC covered call max profit and max loss calculated?: Max profit equals short-strike minus cost basis plus premium times 100; max loss is cost basis minus premium (at zero). Breakeven is cost basis minus premium. For the MPC covered call priced from the end-of-day chain at a 30-day expiry (ATM IV 36.60%), the computed maximum profit is $1,799.50 per contract and the computed maximum loss is -$25,199.50 per contract. Live intraday quotes will differ as the chain moves through the trading session.
What is the breakeven for a MPC covered call?: The breakeven for the MPC covered call priced on this page is roughly $252.01 at expiration, derived from end-of-day chain premiums. Breakeven is the underlying price at which the strategy's P&L crosses zero ignoring transaction costs and assignment risk. The current MPC market-implied 1-standard-deviation expected move is approximately 10.49%; if the move sits well outside the breakeven distance, the structure's risk-reward becomes correspondingly tighter.
When should you consider a covered call on MPC?: Covered calls on MPC are an income strategy run on existing MPC stock positions; traders typically sell calls at 25-35 delta with 30-45 days to expiration to balance premium against upside cap.
How does current MPC implied volatility affect this covered call?: MPC ATM IV is at 36.60% with IV rank near 46.84%, which is mid-range against its 1-year history. Strategy selection depends more on directional thesis and expected move than on a strong IV signal.